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Uncertainty Remains As Business Community Transitions Into Level 3

A recent COVID-19 business survey, conducted by the Wellington Chamber of Commerce and Business Central, shows that while 92 percent of respondents intend to operate in some form at level three, just 17 per cent will be operating as usual. The remaining 75 per cent of businesses will operate under capacity and are overwhelmingly uncertain about what the next three to six months holds.

"It’s good news more businesses have begun to operate in level three, but many remain unable to operate anywhere near full capacity," says John Milford Wellington Chamber of Commerce and Business Central Chief Executive.

"Just seven per cent of businesses now remain closed, down from twenty-two per cent at Alert Level Four. However, in contrast only an additional four per cent of businesses will be back to operating at full capacity.

"Consequentially, there remains a high degree of uncertainty. Businesses can see a storm is brewing in the post-COVID environment, and businesses were unable to ready themselves for it due to the previous lockdown conditions. Many businesses believe things will get much worse before they get better.

"The business community knows things will not go back to normal, but they don’t know what that means at the moment.

"This is reinforced by businesses' expected business earnings over the next three to six months. A net 64 percent of respondents believed their earnings would be worse than their current level.

"We asked the same question in our business confidence survey last month and had a net 14 percent of businesses believe their earnings would be worse.

"A lack of confidence in their own business earnings means businesses won’t be investing or trying to grow, they’re going to hunker down and try to survive through the coming months.

"When we asked what further support our members will need over the next three to six months. Nearly half, (46%) were unsure or needed more advice and clarity from the government.

"On the other-side, 50 percent of respondents said they will need more financial support over the next three to six months, with suggestions ranging from wage subsidy extensions, to rent relief, and forms of tax payment deferrals and rebates.

"76 percent of our respondents have used the wage subsidy to help get them through the past five weeks and it will continue to help as things start to pick up again. But the subsidy is due to run out in a couple of pay-cycles, we need to make sure that by then we are back to business in the new normal, and if not, what ongoing support there might be.

"Businesses have been desperate to reopen and begin trading again. Most do not have the privilege of building up cash reserves. We must find solutions that preserve as much as possible to mitigate against further job losses and devastating economic impacts.

The survey asked 11 questions around the impact of the alert level 4 lockdown and was sent to Wellington Chamber of Commerce and Business Central members across Central New Zealand - from Gisborne to New Plymouth and down to Nelson. The survey received 477 responses between April 20th and 24th.

The next business confidence survey conducted by the Wellington Chamber of Commerce and Business Central will be in mid-May.

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